State-run coal miner Coal India Ltd (CIL) has reported a 4 per cent increase in its net profit for the financial year ended 31 March 2016 to Rs14,274 crore from Rs13,727 crore for 2014-15.
CIL reported record production of 539 million tonnes in the 2015-16 financial year despite a fall in coal prices and increasing costs of production.
Offtake was also at a record high of 534 million tonnes during 2015-16. Net sales increased five per cent to Rs75,644 crore. ''Volume growth helped in reducing the overall cost per tonne and maintaining margins, despite a fall in average realisations,'' said CIL.
Over-burden removal, a process of exposing seams for future mining, jumped 30 per cent in 2015-16 against a growth was 9.9 per cent in 2014-15.
For the quarter ended 31 March 2016, CIL's net profit increased 0.2 per cent to Rs4,248 crore from Rs4,239 crore during the corresponding period of 2014-15. Coal production increased 8.8 per cent against 151.86 million tonnes in the year-ago period.
However, CIL said its expenditure increased substantially while price realisation against volume growth came down.
''As a substantial part of the total expenditure is fixed in nature and due to an increase in volume of production, the cost per tonne shows positive decline of 3.5 per cent compared to the previous year,'' said CIL.
Prices of coal fell in open market auctions and fuel supply agreements (FSAs).
FSA prices declined to Rs1,311 a tonne during FY16 against Rs1,327 a tonne in the previous year. The e-auction price fell to Rs1,858 a tonne against Rs2,450 a tonne in FY15.
''This, coupled with some decline in washed coal realisations, etc, resulted in the overall price realisation reducing during the year to Rs1,418 a tonne from Rs1,475 a tonne in the previous year,'' said the company.
The cost for CIL increased mostly due to corporate social responsibility expenses, ex gratia payment to employees and contractual expenses, among others. It, however, made major savings in costs from continuous reduction in manpower (by natural attrition) and softening of fuel prices like diesel.